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Sports sneaker wars are going international

A few weeks ago, in an effort to raise money and its profile, the Indian national cricket team invited athletic footwear companies to bid on a five-year deal to outfit its 16 players. The announcement garnered little attention outside India - this was not, after all, a competition to dress LeBron James or Kobe Bryant - but the eight-figure sponsorship bids certainly did.

Reebok offered $26 million, only to be topped by a $28 million bid from its soon-to-be-sibling Adidas. In turn, Adidas was bested in dramatic fashion by a $44 million check from Nike. An Indian cricket official, Lalit Modi, said the Nike bid made the team the "world's most valued brand in team sponsorship."

The sneaker wars, once fought on the basketball courts and football fields of the United States, are increasingly being waged on the track ovals of China, the volleyball courts of Brazil and the soccer fields of Mexico, long overlooked markets filled with the devoted fan base that footwear companies thrive on. From automobiles to airplanes to pharmaceuticals, more and more companies are moving their marketing machines to fertile developing countries to generate the growth they can no longer rely on in the United States and Europe.

Nike remains the No. 1 seller of footwear and athletic apparel in the world, but the acquisition of Reebok by Adidas-Salomon, approved last week by Reebok shareholders and the European Union, could throw up a considerable roadblock to the swoosh across Latin America and Asia.

Nike's founder, Philip Knight, might have had that on his mind last week as he abruptly dismissed his successor, William Perez, as chief executive.

While the famously competitive Knight made no mention of his rivals, John Shanley of the Susquehanna Financial Group said, "There is no way they can overlook a threat this serious."

Adidas, the No. 2 footwear company, and Reebok, the No. 3 company, have proved to be nimble competitors. In China, for example, Adidas spent an estimated $80 million to secure the sponsorship of the 2008 Olympics in Beijing, while Reebok has sewn up an endorsement, valued at $70 million, from Yao Ming, the Chinese basketball sensation.

In Japan, the second-biggest market for sporting goods after the United States, Adidas has just overtaken Nike in sales, a coup that would have been unthinkable a few years ago.

To be sure, Nike firmly dominates the athletic footwear business and is unlikely to lose its grip anytime soon. In the United States, where the sneaker market has remained flat for the past decade, it controls 36.3 percent of the market, compared with 21.1 percent for Adidas and Reebok combined, according to Sporting Goods Intelligence, a trade publication. But the gap is far narrower in the faster-growing international market, where Nike controls 30.9 percent of sales, compared with 28 percent for Adidas and Reebok combined.

"In every single region in the world, it is now a two-horse race between Nike and Adidas," said Jan Runau, a spokesman for Adidas.

Analysts and executives agree that the biggest battle will unfold in China, the world's most populous country, where Nike, Reebok and Adidas are scrambling to nail down sponsorships, endorsements and store locations before the Olympics.

Nike, based in Beaverton, Oregon, has sponsored 21 Chinese sports federations and has endorsements from top Chinese athletes, including two Olympic gold medalists, Lui Xiang and Xing Huina. It has built a sprawling outdoor sports facility, called Nike Beijing Park, which boasts soccer fields and basketball courts used by 5,000 children a day.

The company does not break out sales by country, but says it has been helped by the growth of a middle class that is willing to pay for $250 Limited Edition Zoom LeBron III sneakers, which sold out across China in just two hours when introduced this year.

But Adidas, based in Germany, has also made strong inroads in China. Besides sponsoring the 2008 Olympics, the company has sponsored the country's women's World Cup soccer team, its soccer federation and its volleyball team.